Unused equipment may release cash, but the sale proceeds are not always the advertised price. Check ownership, finance, selling costs and whether the business will need the asset again.
Corporate Recovery Partners
01 / 06
The spare machine looks like an easy answer
A joinery owner wants to sell a second cutting machine that has been idle for months. Its estimated price appears enough to clear a supplier balance. The accountant asks about the finance payout and a planned contract that may require both machines. Those details can change whether selling helps.
Find the purchase and finance records and identify the legal owner. Ask for advice about any security, consent or release requirements. Possession of equipment does not establish that the company can freely transfer it.
Obtain a current payout figure where relevant. Do not promise the gross selling price to a creditor while an associated finance obligation remains unaccounted for.
Compare realistic sale evidence with transport, auction or agent charges and any necessary preparation. Ask the accountant about tax and accounting treatment rather than assuming the entire price becomes spare cash.
Record the likely sale timing and uncertainty. An advertised valuation is not a completed transaction, and a buyer enquiry should not be entered as money already available.
Review actual utilisation and upcoming contracted work. Compare keeping the machine with hiring a replacement when genuinely needed. Include delivery, availability and downtime rather than only the hire rate.
A rarely used asset may still protect an important production step. Conversely, keeping it because it once cost a great deal can leave cash tied up without a credible future use.
Put the net receipt into the business cash forecast. Business.gov.au recommends showing the timing of incoming and outgoing money. Test whether the sale gives lasting relief or merely covers one payment before the same shortage returns.
Where solvency is uncertain, seek advice before selecting debts to pay or selling to a related person. Keep the valuation, authority and payment trail clear and do not treat an informal transfer as a completed market sale.
